Contemporary Logistics 8 Questions and Answers Graded A+
ABC analysis of inventory - Answers concept that recognizes that because inventories are not of equal
value to a firm, they should not be managed in the same way
Back order - Answers placing an order for an item that is out of stock
Complementary products - Answers inventories that are used or distributed together (e.g., razor blades
and razors)
Cycle (base) stock - Answers inventory needed to satisfy demand during an order cycle
Dead inventory (dead stock) - Answers product for which there is no demand
Economic order quantity (EOQ) - Answers an order size that minimizes the sum of carrying and ordering
costs
Fixed order interval system - Answers inventory is replenished on a constant, set schedule and is always
ordered at a specific time; the quantity ordered varies depending on forecasted sales before the next
order date
Fixed order quantity system - Answers inventory is replenished with a set quantity every time it is
ordered; the time interval between orders may vary
Inventory - Answers stocks of goods and materials that are maintaned for many purposes
Inventory carrying (holding) costs - Answers the costs of holding an inventory, such as interest on
investment, insurance, deterioration, and so on
Inventory shrinkage - Answers refers to the fact that more items are recorded entering than leaving
warehousing facilities
Inventory turnover - Answers the number of times an inventory is used or replaced each year
Just-in-time (JIT) approach - Answers seeks to minimize inventory by reducing (if not eliminating) safety
stock, as well as having the required amount of materials arrive at the production location at the exact
same time they are needed
Lean manufacturing (lean) - Answers focuses on elimination of wastes and the increase of speed and
flow
Ordering costs - Answers the costs associated with ordering inventory, such as order costs and setup
costs
Pipeline (in-transit) stock - Answers inventory that is in route between various nodes in a logistics
system
ABC analysis of inventory - Answers concept that recognizes that because inventories are not of equal
value to a firm, they should not be managed in the same way
Back order - Answers placing an order for an item that is out of stock
Complementary products - Answers inventories that are used or distributed together (e.g., razor blades
and razors)
Cycle (base) stock - Answers inventory needed to satisfy demand during an order cycle
Dead inventory (dead stock) - Answers product for which there is no demand
Economic order quantity (EOQ) - Answers an order size that minimizes the sum of carrying and ordering
costs
Fixed order interval system - Answers inventory is replenished on a constant, set schedule and is always
ordered at a specific time; the quantity ordered varies depending on forecasted sales before the next
order date
Fixed order quantity system - Answers inventory is replenished with a set quantity every time it is
ordered; the time interval between orders may vary
Inventory - Answers stocks of goods and materials that are maintaned for many purposes
Inventory carrying (holding) costs - Answers the costs of holding an inventory, such as interest on
investment, insurance, deterioration, and so on
Inventory shrinkage - Answers refers to the fact that more items are recorded entering than leaving
warehousing facilities
Inventory turnover - Answers the number of times an inventory is used or replaced each year
Just-in-time (JIT) approach - Answers seeks to minimize inventory by reducing (if not eliminating) safety
stock, as well as having the required amount of materials arrive at the production location at the exact
same time they are needed
Lean manufacturing (lean) - Answers focuses on elimination of wastes and the increase of speed and
flow
Ordering costs - Answers the costs associated with ordering inventory, such as order costs and setup
costs
Pipeline (in-transit) stock - Answers inventory that is in route between various nodes in a logistics
system
